Transatlantic Petroleum Ltd. Reports Operating Results (10-Q)

Transatlantic Petroleum Ltd. has a market cap of $951.12 million; its shares were traded at around $3.12 with and P/S ratio of 32.5. TAT is in the portfolios of T Boone Pickens of BP Capital, George Soros of Soros Fund Management LLC.

Highlight of Business Operations:

Revenue. Total revenue increased to $31.0 million in the six months ended June 30, 2010 from the $8.8 million realized in the same period in 2009. The increase was the result of increased production of crude oil from the Selmo and Arpatepe oil fields and natural gas production beginning in April 2010 from the Edirne gas field. In addition, we recorded $3.8 million in oilfield services revenue during the six months ended June 30, 2010. We had no oilfield services revenue during the same period in 2009.

Comprehensive Loss. The comprehensive loss for the six months ended June 30, 2010 was $35.2 million, or $0.12 per share (basic and diluted), compared to a comprehensive loss of $12.4 million, or $0.08 per share (basic and diluted), for the six months ended June 30, 2009. The comprehensive loss for the six months ended June 30, 2010 was primarily composed of production expenses of $8.9 million, exploration, abandonment and impairment expense of $17.8 million, general and administrative expenses of $13.0 million, and depreciation, depletion and amortization expenses of $9.1 million.

Revenue. Total revenue increased to $18.6 million in the quarter ended June 30, 2010 from $7.4 million realized in the same period in 2009. The increase was the result of increased production of crude oil from the Selmo and Arpatepe oil fields and natural gas production beginning in April 2010 from the Edirne gas field, as well as higher prices. The Edirne gas field began production in April 2010. In addition, we recorded $2.8 million in oilfield services revenue during the second quarter of 2010. We had no oilfield services revenue during the same period in 2009.

Comprehensive Loss (Income). The comprehensive loss for the quarter ended June 30, 2010 was $21.9 million, or $0.07 per share (basic and diluted), compared to comprehensive income of $983,000, or $0.01 per share (basic and diluted), for the quarter ended June 30, 2009. The comprehensive loss for the second quarter of 2010 was primarily composed of production expenses of $4.7 million, exploration, abandonment and impairment expense of $13.3 million, general and administrative expenses of $7.0 million, and depreciation, depletion and amortization expenses of $5.2 million.

At June 30, 2010, we had cash and cash equivalents of $74.1 million, $69.4 million in short-term debt, $10.8 million in long-term debt and working capital of $7.5 million compared to cash and cash equivalents of $90.5 million, $7.5 million in short-term debt, no long-term debt, and working capital of $80.9 million at December 31, 2009. Cash used in operating activities for the period ended June 30, 2010 increased to $31.7 million compared to cash used in operating activities of $16.6 million for the period ended June 30, 2009, primarily as a result of increased drilling and exploration activity.

In addition to cash, cash equivalents and cash flow from operations, at June 30, 2010, we had a senior secured credit facility, a $100.0 million credit agreement, a $30.0 million term loan, a $11.8 million term loan and stand-by credit agreements with a Turkish bank, each of which is discussed below.

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